Obama's Plan for One Million "Advanced" Vehicles

January 27, 2011

Obama's Plan for One Million "Advanced" Vehicles

Next year’s budget will include rebates, R&D, and charging stations to promote electric cars.

In his State of the Union speech, Obama set a goal of putting one million “electric cars” on the road by 2015. He might not have meant to say it exactly that way. Indeed, a press release from the Department of Energy, giving details about the President’s budget (which will come out in the middle of February), substituted “advanced technology vehicles” for “electric cars.” Apparently, at least some hybrids (likely plug-in hybrids) will count toward this number. That’s a good thing, because hitting a million electric vehicles in the U.S. by then sounds like a stretch. It took Toyota over 10 years to sell a million Priuses world wide. Electric cars have just started to be introduced, and they cost thousands more than hybrids like the Prius, which will likely slow their adoption. Plug-in hybrids can be cheaper, and they don’t have the range limitations that could limit the market for pure EVs.

Here’s how Obama hopes to reach his goal. First, the Recovery Act has already allocated $2 billion to help build factories for batteries another other electric car components, as well as $400 million for electric vehicle demonstration and infrastructure. Under the fiscal year 2012 budget, a tax credit worth up to $7,500 for plug-in hybrids and electric cars will become available as a rebate as soon as a car is bought–so people don’t have to wait around for the tax return. The budget will also increase R&D spending for vehicle technology and for a fourth “energy innovation hub” focused on developing better batteries. And it will include fund 30 $10 million community projects geared towards making electric vehicles more attractive, by “regulatory streamlining, infrastructure investments, vehicle fleet conversions, deployment of EV incentives (e.g., parking, HOV access) partnerships with major employers/retailers, and workforce training.”

Electric vehicles certainly need some help. Batteries are expensive, and the first mass-market electric cars, such as the Nissan Leaf, can’t go very far on a charge. Public fast-charge stations could make the vehicles more convenient, and instant rebates could help sales. But getting funding increases past Congress when the House, in particular, is working to decrease government spending, could be difficult.